Vodacom is forecasting a stronger performance in the second-half of the 2024 financial year after group revenue grew 1.6% to R39.5 billion for the quarter ended 31 December, up from R38.9bn during the same period a year ago, impacted by a stronger rand.
South Africa’s largest telecommunications group by market share reported Monday that group service revenue growth accelerated to 11.6% on a normalised basis, above its medium-term target.
Vodacom said South Africa service revenue growth improved to 3.2% supported by prepaid while Egypt grew service revenue 44.3% in local currency, with Egypt financial services revenue up.
The improved Vodacom South Africa performance was underpinned by a variety of factors including successful seasonal campaigns, improved consumer environment in the prepaid segment and a 40.6% increase in data traffic.
Service revenue from beyond mobile was another highlight, increasing by 11.3% and contributing R2.8bn to South Africa’s total of R16.2bn.
Vodacom expects to invest between R11.0 and R11.2bn of capital expenditure in the current financial year to further enhance customer experience after having invested R3.2bn in the quarter.
International service revenue increased 1.4% (7.0% normalised*) buoyed by while significant contributions from Tanzania and the Democratic Republic of Congo, but was impacted by rand strength and pressure in Mozambique
Vodacom CEO, Shameel Joosub, said that while currency headwinds continue to impact various markets where the group operates, the focused execution of its strategy has resulted in a resilient operational response to the extent that it remains well on track to deliver on its medium-term financial targets.
Additionally, Joosub said that the recent currency market stability, particularly in Egypt, bodes well for the Group's performance in the year ahead.
“In particular, the quarter was positively impacted by accelerated growth in South Africa's prepaid market in addition to another stellar performance in Egypt and Tanzania while network operators in Mozambique, including Vodacom, have been hampered by post-election tensions since October 2024,” Joosub said.
“On a normalised basis, which removes the impact of currency fluctuations, Group service revenue accelerated to 11.6%, which is comfortably ahead of our stated medium-term target.”
Joosub added that Vodacom was well on track to reach its medium-term target of a 25-30% contribution to Group service revenue from what it now calls beyond mobile services.
Previously billed as “new services”, beyond mobile encompasses digital and financial services, fixed and IoT and now makes up 21.4% of the Group total having delivered R6.6bn in service revenue in the quarter.
“Our financial services business, a clear strategic priority for the Group and the largest contributor to beyond mobile, has seen the value of mobile money transactions facilitated by our platforms increase 19.1% in US dollars,” he said.
“We now process an impressive $1.2bn a day. This highlights the scale of this business and solidifies our position as Africa’s largest mobile money platform by transaction value processed. Excluding Safaricom, the Group generated R3.6bn in service revenue in the quarter, up 5.7% or 17.2% on a normalised basis.”
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